Rover's Weekly Market Brief - 2/26/2016

February 26, 2016 |

Indices

Dow Jones: 16,639.97 (+1.5%)

NASDAQ: 4,590.47 (+1.9%)

S&P 500: 1,948.05 (+1.6%)

Commodities

Gold: 1,223.60 (+1.1%)

Copper: 211.10 (+1.5%)

Crude Oil: 33.00 (+10.5%)

Economy

Real GDP growth was stronger than initially estimated. It grew 1% in the fourth quarter of 2015, according to the Bureau of Economic Analysis’ second estimate. The second estimate is an upward revision from the initial 0.7% reported in January. The revision reflects higher private inventory investment and lower imports. Overall, Real GDP grew 2.4% in 2015, the same rate as in 2014.

Crude Oil rose 10.5% this week amid talks of another producer meeting in March to freeze production. It closed at $33.00 per barrel. Commercial crude oil inventories (excluding the Strategic Petroleum Reserve) increased 0.7% to 507.6 million barrels from 504.1 million the past week. The national average retail regular gasoline price rose 0.4% to $1.730 from $1.724 per gallon the preceding week.

The labor market continues to show positive signs as continuing claims fall. Although initial unemployment claims rose 3.8% to 272,000 from 262,000 the past week, continuing claims fell 0.8% to 2,253,000 from 2,272,000. Additionally, the continuing claims 4-week moving average fell 0.2% to 2,257,000 from 2,262,250. The insured unemployment rate was unchanged from the past week at 1.7%.

Markets

Home Depot (NYSE: HD) announced a 9.5% revenue increase and a 6.7% net income increase for Q4 2015 YoY. Diluted EPS rose 11.4% to $1.17 from $1.05 the same quarter in 2014. Comparable store sales grew 7.1% as big-ticket purchases in appliances, roofing and special-order kitchens increased. Additionally, installation services in roofing, sheds and countertops contributed to growth.

Lowe’s (NYSE: LOW) reported a revenue increase of 5.6% for Q4 2015 YoY. However, net income fell 97.6% as selling, general, and administrative expenses climbed 19.4% following the firm’s decision to exit its Australian joint venture with Woolworths. Consequently, diluted EPS declined 97.8% to $0.01 from $0.46 the same quarter the previous year. Comparable sales for the quarter increased 5.2%.

TJX Companies’ (NYSE: TJX) revenue rose 7.9% while net income rose 2.8% for Q4 2016 YoY. Diluted EPS increased 6.5% to $0.99 from $0.93 from the same quarter in fiscal year 2015. Marmaxx, homegoods, and international segment revenue increased 8.2%, 14.2% and 6.9%, respectively while TJX Canada sales fell 0.8%. Consolidated comparable store sales increased 6% for the quarter.

Kraft Heinz (NASDAQ: KHC) posted a 154.5% rise in revenue and a 292.7% increase in net income for Q4 2015 YoY. As a result, diluted earnings per share were $0.23 from losses per share of $0.04 the same quarter the past year. The increase in revenue was driven by the successful merger of Kraft Foods Group, Inc. into a wholly owned subsidiary of H.J. Heinz Holding Corporation in July of 2015.

Looking Ahead

The following companies will be releasing their earnings results next week.

Monday Tuesday Wednesday Thursday Friday
Endo (ENDP) Medtronic (MDT) Costco (COST) Kroger (KR) Staples (SPLS)
Workday (WDAY) Barclays (BCS) Heineken (HEINY) Broadcom (AVGO) Big Lots (BIG)

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